Retail Inflation in India Hits Six-Year Low at 3.16% in April, Led by Food Price Declines

Retail inflation eases to a 69-month low of 3.16% in April as food prices, including vegetables and pulses, significantly declineApril 2025 recorded low rates of India’s retail inflation rate at 3.16%, the weakest in almost six years. This is mainly due to the reduction in the prices of food, in particular vegetables, pulses, cereals, and meat. According to the National Statistics Office (NSO), this is the sixth straight month that inflation eased, with food inflation playing a part in the modest decline.As calculated by the Consumer Food Price Index (CFPI), food inflation also slowed to 1.78% in April, down from 2.69% in March and much lighter than the previous 2024 with a growth rate of 8.7%. One of the major causes of this decline was the dramatic decline in the price of vegetables, which declined by 10.98%, the highest rate in February 2023. Pulses also experienced a lot of price decrease, where prices went down by 5.23%, the highest decrease over the past six years. Also, the meat and fish segment registered a drop of 0.35% after two years of price stability. Rural and Urban Inflation TrendsThe drop in inflation was higher in the rural areas than in the urban areas. In April, retail inflation in the rural regions fell to 2.92%, down from 3.25% in March, while urban inflation recorded a decline of 3.36%, from 3.43%. Food inflation in rural areas also tempered down, recording a drop in rate to 1.85 per cent from 2.82 per cent in March. The food inflation rate decreased to 1.64% in urban areas from 2.48%. The lower reduction in the rural regions implies that rural demand is recovering, because reduced food prices will boost the purchasing power of the rural households.However, there were specific increases in certain segments. The rate of inflation for fuel and light went up to 2.92% against 1.48% in March, while the core inflation, which excludes food and fuel, was stable at 4.1%. Outlook for Inflation and Potential Rate CutProjecting into the future, economists expect inflation to stay under control with help from favourable weather and robust rabi and kharif harvests. There are speculations that the Reserve Bank of India (RBI) could reduce the interest rates by 25 basis points during its next monetary policy review in June 2025. Experts hope that a favorable monsoon will work to contain food inflation for the rest of the fiscal year.The post Retail Inflation in India Hits Six-Year Low at 3.16% in April, Led by Food Price Declines appeared first on ICO Desk.